AFGE v. BROWN

At issue in this case, as it likewise is in National Federation of Federal Employees, Local 1622 v. Brown, 481 F. Supp. 704 (D.D.C. 1979), a case that is also before the Court and in which a memorandum opinion and order is filed this day, is the question whether the 5.5 percent cap on salary increases imposed upon federal employees for the fiscal year 1979 should have been applied to the class of workers represented by plaintiffs.

The parties to this class action have come before the Court pursuant to cross-motions for summary judgment, each asserting that there exists no genuine issue as to any material fact and that it is entitled to judgment as a matter of law. Upon consideration of the parties' pleadings and the record as a whole, it appears this case is indeed ripe for disposition by summary judgment. Defendants' motion seeking such relief will be granted and the plaintiffs' motion denied.

FACTS

Plaintiff union American Federation of Government Employees and the named individual plaintiffs represent the class consisting of those nonappropriated fund prevailing rate workers
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employed during fiscal 1979 (October 1, 1978 through September 30, 1979) by the Department of Defense (DoD) and the Veterans Administration Canteen Service at various locations throughout the United States and in Guam. The wage rates and job gradings of the class of employees they represent are determined in accordance with the statutory scheme set forth in 5 U.S.C. §§ 5341-5349. More particularly, wage increases for this class of workers are established by the procedures set out at 5 U.S.C.A. § 5343(a) (West Cum.Supp.1979), which in pertinent part provides:

The pay of prevailing rate employees shall be fixed and adjusted from time to time as nearly as is consistent with the public interest in accordance with prevailing rates. . . . To carry out this subsection

(4) the head of each agency having prevailing rate employees in a wage area shall apply to the prevailing rate employees of that agency in that area, the wage schedules and rates established by the lead agency, . . . for prevailing rate employees in that area . . ..

Pursuant to section 5343(a), the Civil Service Commission, now the Office of Personnel Management (OPM)
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defined approximately 145 individual wage areas and designated DoD as the lead agency for wage surveys to be conducted for nonappropriated fund employees in those wage areas. Acting in its capacity as lead agency, prior to October 24, 1978, DoD conducted wage surveys in various locales to determine the pay rates prevailing in the private sector for workers in the same trades and crafts as the members of the class plaintiffs represent. Thereafter, it analyzed the data gathered and developed wage schedules for the nonappropriated fund prevailing rate workers in the aforementioned wage areas. The schedules so developed suggested increases in basic pay rates for various groups of workers in excess of 5.5 percent. The effective date of the proposed increases was October 22, 1978. See 5 U.S.C. § 5344(a) (1976).

On October 24, 1978, President Carter requested in a nationally televised address on inflation that wage increases for all but the nation's lowest paid workers be limited to a maximum of seven percent. He further announced that a pay cap of 5.5 percent had already been placed on wage increases for federal employees for fiscal 1979.
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By letter dated October 30, 1978, DoD requested advice from the Civil Service Commission concerning the impact of the President's anti-inflation program on wage schedules for nonappropriated fund prevailing rate workers, and it withheld issuance of the proposed schedules pending a reply to its request. On January 4, 1979, President Carter issued a memorandum to the heads of all executive departments and agencies in which he made a policy determination that the public interest required that no category of federal employees receive a pay increase exceeding 5.5 percent for fiscal 1979. He further issued a directive that nonappropriated fund workers were to be included under the 5.5 percent cap,
*fn4"
and ordered the Chairman of the Civil Service Commission and his successor, the Director of OPM, to assist agency heads in complying with that policy.

On February 28, 1979, OPM issued a personnel bulletin applying to lead agencies responsible for establishing wage schedules pursuant to section 5343(a). Federal Personnel Manual Bulletin 532-31 (Feb. 28, 1978). According to the bulletin, wage schedules for nonappropriated fund workers having effective dates of October 1, 1978, through September 30, 1979, were directed to be paid unless they exceeded the previously scheduled wage rate by more than 5.5 percent. Id. Beginning that same day, DoD issued the wage schedules for the areas in which the class represented by plaintiffs are employed, none of which provided for a pay rate increase exceeding 5.5 percent. These increases were made retroactive to October 22, 1978, the effective date of the schedules.

In April 1979 President Carter authorized an exception to the 5.5 percent pay increase limitation for all nonappropriated fund employees earning less than $ 4.00 per hour. In an official bulletin issued April 20, 1979, OPM advised lead agencies that only the portion of a wage increase raising a worker's pay above $ 4.00 per hour was to be measured against the 5.5 percent limit. Federal Personnel Manual Bulletin 532-32 (Apr. 20, 1979). Employees exempted under this policy from the 5.5 percent limitation are to receive back pay from ...

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